Holders of Health Management Associates, Inc., (HMA) stock have overwhelmingly approved a $7.5 billion deal for HMA to be acquired by rival Community Health Systems, Inc., (CHS) creating the nation’s largest publicly-traded hospital company.
According to CHS, approximately 98.7 percent of the votes cast at a special meeting of HMA stockholders were in favor of adoption of the merger agreement. Reuters reported that a CHS presentation put the the aggregate purchase price for HMA at $7.5 billion plus a contingent value right of up to approximately $270 million.
CHS stock had been down the slower than expected growth of health care utilization in the improving economy affected its and other hospital operators’ patient volumes. However, updated guidance reflecting the HMA acquisition bolstered its stock.
“We are pleased that HMA stockholders have seen the significant strategic value in combining with CHS,” stated Wayne T. Smith, CHS’s Board chairman, president and CEO in its press release announcing the results of the vote. “We are working now to finalize regulatory approvals, and we expect to complete this transaction quickly so that we can integrate our two companies and deliver on our plans for long-term growth and value creation.”
CHS is based in Franklin, Tenn., a Nashville suburb and owns, leases or operates 135 hospitals in 29 states with an aggregate of approximately 20,000 licensed beds. Health Management Associates, Inc., through its affiliates, owns and manages 71 hospitals in 15 states with approximately 11,000 licensed beds.
In a CHS leadership restructuring announced along with the merger, David Miller was promoted from president of CHS's Division 1 operations to president and chief operating officer. In this role, he will "lead efforts to effectively integrate hospitals acquired as part of the company’s acquisition of Health Management Associates, Inc."